Tracker - reducing repayments

[MrKeane]

Is it possible to reduce my monthly repayments on a ulster bank tracker?

My guess is that by reducing repayments the amount of interest paid will be higher but since the bank are losing money on paper they won't want to do it without putting me on a different rate?

Currently paying ECB +0.8% approx., so if I try and increase the term of the loan are they likely to be ok with it or will they want to put me on a variable rate with something like ECB +1.2% or whatever the rate is?

 

[Dreamerb]

My guess is that by reducing repayments the amount of interest paid will be higher but since the bank are losing money on paper they won't want to do it without putting me on a different rate?

The amount of interest you pay on a month-to-month basis is more or less the same - at least at the outset - although the longer term will mean that you pay a substantially larger sum over the lifetime of a longer mortgage.

Currently paying ECB +0.8% approx., so if I try and increase the term of the loan are they likely to be ok with it or will they want to put me on a variable rate with something like ECB +1.2% or whatever the rate is?

You'll only find this out for sure by actually talking to your lender, but my guess is that (a) they'll see your need to renegotiate as meaning your loan may be riskier, and require a premium to reflect that, and (b) since your loan is probably not profitable at the moment anyway, they may take the opportunity to adjust the terms. I doubt they'll even offer you a tracker, although they might, given the current interest rate outlook, give you a reasonably good fixed rate for two to three years. That may well suit your requirements, if you need certainty on outgoings.

I'd suggest you plug in some numbers on Karl Jeacle's mortgage calculator (www.jeacle.ie/mortgage) - it may turn out that a tracker on +0.8% for your current term is no dearer than a variable at 1.2-1.5% over a somewhat longer term. Plus you should factor in that you're likely to have additional life assurance costs to cover the longer term.

All things considered, if you don't absolutely have to change, do try to maintain your current mortgage - trackers are basically unavailable now, and the margin is good.